Citicorp charges a 11 percent interest rate on all new car loans. If the inflation rate is 6 percent, Citicorp receives a real interest rate of

Name: Citicorp charges a 11 percent interest rate on all new car loans. If the inflation rate is 6 percent, Citicorp receives a real interest rate of
Brand: Quizplus
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Question

Quizplus · Accepted Answer

To find the real interest rate, we need to subtract the inflation rate from the nominal interest rate. 
Real interest rate = Nominal interest rate - Inflation rate 
= 11% - 6% 
= 5% 
Therefore, the answer is D.

Citicorp Charges a 11 Percent Interest Rate on All New